GRAPH: The critical minerals to watch in the US

Statements that Trump’s plans to make Canada the 51st state is all about metals and minerals, a deal for Ukraine’s rare earths (now rejected) being included in peace talks, and the current US administration reiterating its desire to buy Greenland, have thrust critical minerals into the public view like never before.

Amid all this talk it’s easy to forget that anything to do with metals and minerals – whether deemed critical or not – is really about one country. China.

China unveiled a series of retaliatory measures against new US tariffs a fortnight ago, including restrictions on the export of tungsten, tellurium, bismuth, indium, and molybdenum, stating that export licenses will only be granted to companies complying with “relevant regulations.”

These measures fall short of the mineral export bans that China imposed on the US in December, which included gallium, germanium, antimony, and so-called superhard materials.

Antimony prices outside China have doubled this year while bismuth, even in the absence of an outright ban, has shot up to a decade-high.

Graphite is used in virtually all electric vehicle and energy storage batteries and Beijing’s tightening of export rules around graphite late last year could have bigger impacts. China dominates global production, and to an even greater extent, processing of the anode material.  

The rules in effect around graphite are similar to those applied to rare earths in 2023, but so far Chinese supply of rare earth metals and magnets to the rest of the world has been ample and prices are subdued inside and outside the country.   

More than a decade ago China’s imposition of export quotas saw rare earth prices skyrocket with, for example, dysprosium going from $118/kg to $2,262/kg between 2008 and 2011. China ended up in front of a WTO tribunal in 2010 and the industry calmed down.

While rare earth exploration and production outside China have boomed since then, the country’s grip on downstream permanent magnet and rare earth metal production will take many more years to fully prise. 

While a relatively small market at the mining level, rare earth metals and magnets are used in the vast majority of EV motors and the 17 elements feed into a variety of high-tech industries including robotics, defence and aerospace. 

China is dealing with its own rare earth problems with the collapse of imports from Myanmar, the country’s main source of particularly heavy rare earths, after rebel forces seized the country’s main producing region on the Chinese border. The turmoil has already led to higher REE prices.

Though there are no bans on graphite and rare earths exports, it’s a shot across the bow, and allows Beijing to keep its powder dry, for any future retaliation against US trade sanctions.

In a note, Capital Economics points out that the targeted goods in China’s latest round represent just $2 billion in annual exports – well below 0.1% of China’s total exports:

“But it adds to a growing arsenal of export controls that Beijing can use to throttle foreign access to key inputs. Around 9% of Chinese exports, including most of its shipments of critical minerals, are now subject to export licensing requirements.”

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